Where them diamond hands come from - How to get rich
A friend of mine told me a few months ago that he finally got into crypto. I was surprised at how quickly he picked up the ropes. His interest started with bitcoin but quickly moved to more lucrative choices.
Within a month he knew more about TA than me and was talking about all these alt-coins I had never heard of. “It’s ok as long as you set a stop loss. Good! Glad to see he understands that.
I watched him quadruple his money in just a few weeks. But as they say “anyone can be professional investor in a bull market”. His plan was to make a million out of a few thousand USD, and he thought he could do it in a year. Yeah, ok.
I know a lot of people who come into the space hoping to do just that. But those are some pretty high hopes to set, and if you actually think it’s going to happen, life will like kick you so hard that you run for the hills.
One day he came to me and said “I didn’t set a stop loss...”.
“It’s ok man, it’ll come back...how hard did you get hit?”
“I’m down 95%...”
“Eesh...well you know, you don’t lose til you sell.”
“I sold....”
Oh boy.
He lost more money than I have, and he did it in one trade. I had told him it was a good idea to keep some eth and btc as a hedge against the insane drops that Alta experience sometimes, but that 1 million was too juicy, he couldn’t let go of it for a moment.
Since then, we discussed his strategy and I gave him my unprofessional but informed advice. We agreed that his best strategy would be to chock up his original investment and make less risky trades to slowly recover his losses but to keep low expectations because it might take a few years. Since he still had a steady income, he’ll dollar cost average 5-10% of his salary into btc and eth and not play with any of it.
It’s good to dream big, but the more idealistic you want to be, the more realistic you have to be...and this is coming from one of the most idealistic people you know. Amazing things can happen, but that doesn’t mean you don’t plan for the worst.
The older I get, the more I realize the desire “not to work” is an empty dream. It’s based on running away from things that make you uncomfortable. People find fulfillment in purpose, and purpose requires work. It doesn’t mean the work can’t be fun, but fun is not the same as easy.
Your dream would COULD be easy, but chances are, there are things you need to learn to be capable of living such an ideal life...sometimes hard lessons. Sometimes it takes falling hard. Sometimes it takes a heavy grind and doing something that you initially don’t want to do. But this makes you stronger and better and more capable of being who you want to be.
I empathize with people who are having a hard time finding other sources of income. It’s nice to have crypto to fall back on when nothing else works. But crypto falls apart sometimes too, and we are far from mainstream enough to be a reliable source of income.
So if you are living off crypto until you get your shit together, power to you. If you are living off crypto because you don’t want to do other work, well then better be prepared for some pain, be prepared to miss out on the real life changing wealth, because the ones who can stomach the bloody charts and wait out long droughts are the ones who can really change their lives.
I currently earn about 1/3 of the average salary in Tokyo right now, but I’ve built my life in a way where that’s enough for me to live because I do not plan on cashing out my crypto. An 8x on a small investment is a massive gift, but a 16x is life changing.
I wouldn’t fault you for caving in if you are in a similar situation. I know it’s much harder with kids too! Still. I know this is how people become millionaires. Not overnight, not in two or three trades. Anyone who does that is more than likely to lose it all on the next trade.
That’s not to say I’m destined to become a millionaire through crypto, but I’d rather take the slow but reliable path.
Instead of cashing out and living on my crypto earnings, where my lifestyle is subject to the whims of whales, I’m working as hard as I can to build a steady income in the local currency so I can build my future with that and possibly even buy more crypto during the dips. I have resolved to only cash out if it can help me in building a steady income, and only when the market is up.
The way I’ve set my life up, it’s not easy at all right now but even if crypto went to 0, I’d still have a solid plan. I’m fully hedged, even with little in the bank.
That’s not to say it’ll all go as I plan. There are situations where I’d be compelled to cash out and it’s possible that I fail to build that steady income stream in the near future. In that situation, I’ll be like those of you who seriously can’t find any other way to survive, and there is no shame in that. The world is not always easy on us so we do what we have to do.
I’m just saying, if you can avoid relying on crypto earnings for your life, I’d do it because there is so much to gain but just HODLing. It takes time. Sometimes 5 or 10 years, but if it takes 10 years to 1000x your wealth, that’s really not all that bad, especially when you are building a sustainable life on the side of that.
This recent drop of 50% doesn’t even phase me. The word Bear Market doesn’t phase me, even as I struggle to pay the bills. I never factored in crypto as a way to survive or escape the grind, at least not after a year in the space. I will hold strong down to 20k or even to 8k. If we hit 4K I will probably lose faith, but I still won’t sell. What’s money other than energy? How valuable is a lump sum compared to steady stream? Or several steady streams? That’s how I see it.
I don’t know how long this FUD will last or how bad it will get but I sincerely doubt it will last more than a year. We are either gearing up for a second bull market at the end of the year or sometime next year. The possibility of a 2013 style rise looks extremely likely, both from a TA perspective and from a fundamental perspective. And as much as the narratives talk about retail FOMO and FUD, I think whales are responsible for more than half of the price action at any given time, and most of the rest of it is automated trading. Retail is a blip once you are talking about multi trillion dollar assets. That may not be what you wanted, but that’s how bitcoin becomes a force for massive change in the world. I don’t really love it either but I can ride the waves.
Why would you freak out at this unless you sold your house and car and quit your job? Countries are almost ready to start buying bitcoin. I mean even the richest person on earth is invested (and manipulating markets). We are legit now. This is not going away unless something comes along to replace it and they have taken their sweet time with that so I am doubtful that will happen before the next pump. If you sell now, I think you’ll feel like an idiot in 1 year.
Do what you want to do, but if you look at the people who went from rags to riches in this space, you see a pattern, and it’s patience.
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